This is primarily related to profitability in different banking sectors. A few decades ago, a retail bank couldn't play with certain asset types and business models. After that regulation disappeared, banks found benefit in deposits for their loan books due to fractional reserve banking. But then the rate got lower and lower - so banks began to shut down retail operations, close down branches etc. (they also stopped being able to profit from easy access to retail customers through predatory housing loans etc...) then the reserve rate went straight to 0 during covid.
The small regional banks are scurrying for larger deposits (although not in much danger, investors are a fickle sort and think what happened to Silicon Valley bank had to do with poor safety etc. when it was a fluke and other similar banks like Western Alliance or Zion could weather much larger interest rate increases). They achieve these higher deposits with high interest rates on savings accounts (upwards of 5% right now on 12month CDs).
The largest banks ("too big to fail" is accurate) have access to different financing types and are active in institutional lending, market making etc. They can still make money using older style business models and thus Goldman has been trying to leave consumer banking. [2] That said, even for a consumer banking play this went badly for them. They liberally approved cardholders and didn't nickle and dime them, while issuing 16 billion [1] in loans to cardholders as of February. Being new to the game, they also have limited ability to actually pursue unpaid debt and have been selling loans of at big losses.
The small regional banks are scurrying for larger deposits (although not in much danger, investors are a fickle sort and think what happened to Silicon Valley bank had to do with poor safety etc. when it was a fluke and other similar banks like Western Alliance or Zion could weather much larger interest rate increases). They achieve these higher deposits with high interest rates on savings accounts (upwards of 5% right now on 12month CDs).
The largest banks ("too big to fail" is accurate) have access to different financing types and are active in institutional lending, market making etc. They can still make money using older style business models and thus Goldman has been trying to leave consumer banking. [2] That said, even for a consumer banking play this went badly for them. They liberally approved cardholders and didn't nickle and dime them, while issuing 16 billion [1] in loans to cardholders as of February. Being new to the game, they also have limited ability to actually pursue unpaid debt and have been selling loans of at big losses.
[1] https://9to5mac.com/2023/02/16/apple-card-future-goldmans-sa...
[2] https://www.retailbankerinternational.com/news/goldman-sachs...